1. Which of the following securities has a pre-arranged buyback agreement?
a. Treasury bonds
b. Repurchase agreement
c. Money market fund
d. Variable rate demand notes
2. Suppose that your firm currently has an accounts receivable from an international customer that is incorporated in a country with a very stable government. Which risk does this situation refer to?
a. Foreign exchange risk
b. Event risk
c. Political risk
d. Maturity risk
3. Suppose that your firm currently holds a money market instrument issued by a company that has a weak credit rating. Which risk does this situation refer to?
a. Default risk
b. Liquidity risk
c. Maturity risk
d. Foreign exchange risk